Magazine article American Banker

Anti-$130,000 Club Adds Shelby

Magazine article American Banker

Anti-$130,000 Club Adds Shelby

Article excerpt

A key Senate Banking Committee member on Monday joined the growing chorus of policymakers publicly stating their opposition to an increase in per-account deposit insurance.

"I do not support raising coverage to $130,000," said Sen. Richard Shelby, R-Ala. Sen. Shelby is in line to become the top Republican on Senate Banking next year after Sen. Phil Gramm of Texas retires. If the GOP wins control of the chamber in the November elections, Sen. Shelby could be the panel's chairman.

Speaking with American Banker after addressing an Institute of International Bankers meeting, Sen. Shelby indicated his adamant stance on raising the current $100,000 limit by quipping, "Let's roll it back to $10,000."

A bill to raise coverage limits to $130,000 is stalled in the Senate Banking Committee as community bankers, who want the increase, face off with the Treasury Department and Federal Reserve Board, which oppose it.

Community bankers won an increase to $130,000 in the House in May, but last week Financial Services Committee Chairman Michael G. Oxley, R-Ohio, said he is open to compromise with the Senate by removing the $30,000 increase.

Sen. Shelby, in his speech to the international banking group, said protecting consumers' privacy would be a "major topic of consideration" in Senate Banking next year, whether he or the current chairman, Sen. Paul Sarbanes, D-Md., is holding the gavel. Both men want to tighten federal rules governing what financial services companies may do with customer information. …

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